XII. Who may assert invalidity. Administrator of mortgagor, see EXECUTORS itors. Putman, Aldrich & Putman v. HamilAND ADMINISTRATORS, § 38 d. ton-Stoddard-McCormick, L.R.A.1918B, 433, Suit by executor to set aside, see EXECUTORS 159 Iowa, 702, 140 N. W. 886. AND ADMINISTRATORS, § 77 a. 869, 50 W. Va. 487, 40 S. E. 564. e. Creditors who become such with full In fraud of marital right, see HUSBAND knowledge of the equities of others have AND WIFE, III. j. no right to complain of such equities. Right of partnership creditors to attack, Horner-Gaylord Co. v. Fawcett, 57 L.R.A. see PARTNERSHIP, § 55 p. Receiver, see RECEIVERS, §§ 42 f, 73 a. a. The question of fraud in the execution of a deed can be raised by a stranger only when he is in a position to claim title as against the grantor. Herron v. Allen, 47 L.R.A. (N.S.) 1048, 32 S. D. 301, 143 N. W. 283. b. Anyone who, but for a deed made to defraud creditors, would have a right to subject the property to his demand, is a "creditor," entitled to sue in equity to set it aside, under W. Va. Code 1906, §§ 30993108. Carr v. Davis, 20 L.R.A. (N.S.) 58, 64 W. Va. 522, 63 S. E. 326. c. A bail in a criminal recognizance, against whom an award of execution upon the recognizance has been made, and to whom a bond has been given to indemnify him against all loss or damage which he might sustain on account of having signed the recognizance, may file a bill in equity, before payment of the recognizance debt, to set aside a deed made by the obligor in such indemnity bond, as made with intent to defraud him as a creditor. Carr v. Davis, 20 L.R.A. (N.S.) 58, 64 W. Va. 522, 63 S. E. 326. d. The administrator of one who dies insolvent may maintain an action to set aside a conveyance of real estate which he made in fraud of creditors. Chester County Trust Co. v. Pugh, 50 L.R.A. (N.S.) 320, 241 Pa. 124, 88 Atl. 319. (Annotated) f. Notice, before one became a creditor, of a voluntary conveyance of property by the debtor, will not affect the creditor's right to have it set aside, if it is fraudulent on its face and contrary to the policy of the law. Scott v. Keane, 42 L.R.A. 359, 87 Md. 709, 40 Atl. 1070. g. In an action by a judgment creditor to set aside as fraudulent a conveyance of property made prior to the entry of the judgment, it is necessary to prove that the claim upon which the judgment is based existed prior to the time of the conveyance, and the judgment itself does not prove such facts, but it is not required to establish the fact that the claim was lawful. Schmitt v. Dahl, 67 L.R.A. 590, 88 Minn. 506, 93 N. W. 665. h. A voluntary conveyance may, in contemplation of law, be invalid as to subsequent creditors, although no actual fraud is proved, when it contains such provisions as the law declares to be fraudulent. Scott v. Keane, 42 L.R.A. 359, 87 Md. 709, 40 Atl. 1070. § 40. Nature of claim of creditor. a. A contingent liability is as fully protected against fraudulent and voluntary conveyances as a claim certain and absolute; and whoever has a claim or demand arising out of a pre-existing contract, although it may be contingent, is a creditor whose rights are affected by such cone. Fraud and injury must coexist to veyances and can avoid them when the concreate a cause of action or grounds for re-tingency happens upon which the claim lief by a creditor against his debtor. Leh- depends. Sallaske v. Fletcher, 47 L.R.A. man v. Gunn, 51 L.R.A. 112, 124 Ala. 213, (N.S.) 320, 73 Wash. 593, 132 Pac. 648. 27 So. 475. § 39. Subsequent creditors. See also post, § 42 a. a. Only those creditors who became such prior to the time of an alleged fraudulent conveyance have a right to complain. Schmitt v. Dahl, 67 L.R.A. 590, 88 Minn. 506, 93 N. W. 655. a b. Subsequent creditors may have voluntary deed set aside if made with the intention and design of defrauding those who should thereafter become creditors, although the grantor is solvent at the time the deed is given. Scott v. Keane, 42 L.R.A. 359, 87 Md. 709, 40 Atl. 1070. c. A conveyance made with the intention and purpose of defrauding those who may become creditors of the grantor will be set aside at the suit of such creditors. Fahey v. Fahey, 18 L.R.A. (N.S.) 1147, 43 Colo. 354, 96 Pac. 251. d. A creditor cannot attack for fraud a sale of personalty by his debtor prior to the inception of the indebtedness if no indebtedness is shown to have existed at the time of the sale, or intent to defraud future credL.R.A. Comb. Dig.-296. b. One must be said to have an "existing equity" when he has an existing right to future payment, though it is contingent, of which it would be inequitable to deprive him, while "an existing debt" implies a present enforceable liability, a debt as distinguished from Fletcher, 47 L.R.A. (N.S.) 320, 73 Wash. an equity. Sallaske v. 593, 132 Pac. 648. $ 41. General creditors. Right to sue to set aside unlawful preference by bankrupt, see BANKRUPTCY, § 66. a. Before a creditor can institute an action to subject land conveyed in fraud of creditors to the payment of his claim, he must have a lien upon it by attachment or judgment. Ziska v. Ziska, 23 L.R.A. (N.S. ) 1, 20 Okla. 634, 95 Pac. 254. b. A simple-contract creditor cannot, prior to obtaining a judgment or lien, attack as fraudulent his debtor's transfer of nonexempt property which may be applie able to the payment of his claim; nor can he sustain an action to enjoin a threatened fraudulent transfer of his debtor's prop 4722 421. FRAUDULENT CONVEYANCES. XII. Who may assert invalidity. devest title of remainderman and vest Who may sue to annul, see PARTIES, § 22 erty until he has obtained a specific lien, Power of court, in setting aside deed, to 92 Pac. 421. § 42. Assignees. a. An indorsee of a note is not precluded Parties in suit to set aside fraudulent con- See also CORPORATIONS, §§ 353 i, 354 e. a. A judgment creditor has the election of one of three remedies where the grantor has fraudulenty conveyed property; he may cause the property to be sold under execution, and leave the purchaser at the sale to contest the validity of the fraudulent ⚫ grantee's title; he may bring an action in equity to remove the alleged fraudulent conveyance as an obstruction to the enforcement of the lien of his judgment and await the result of the action before selling the property; or he may, on return of his execution unsatisfied, bring an action in the nature of creditors' bill to have the conveyance adjudged fraudulent and void grantor. as to his judgment and have the land sold Effect of registration of instrument, see by a receiver or other officers of the court RECORDS AND RECORDING LAWS, § 31. and the proceeds applied to the satisfaction conveyance infected with actual of his claim. Brasie v. Minneapolis Brewfraud may, under Ala. Code, § 1735, being Co. 67 L.R.A. 865, 87 Minn. 456, 92 N. avoided by a subsequent bona fide purchaser W. 340. from the grantor, although he had notice of a. A purchaser from the previous fraudulent conveyance. Gilliland v. Fenn, 9 L.R.A. 413, 90 Ala. 230, 8 So. 15. XIII. Remedies. § 44. Generally. Remedy of party to fraud, see ante, §§ 4, 36. ante, XII. Review of finding as to fraud, see APPEAL Right to money received in attempt to de- Right to have set aside, see CORPORATIONS, Jurisdiction to set aside fraudulent convey ance of nonresidents, see COURTS, § 36 d. By creditor's bill, see CREDITORS' BILL. Jurisdiction of equity, see EQUITY, § 67 i. grantee, see INSURANCE, § 739 a. b. Some process, after judgment at law is rendered, is necessary to fix and secure a lien upon property that has been fraudulently conveyed. Doster v. Manistee Nat. Bank, 48 L.R.A. 344, 67 Ark. 325, 55 S. W. 137. c. Courts of law do not annul and set Doster v. aside fraudulent conveyances. Manistee Nat. Bank, 48 L.R.A. 334, 67 Ark. 325, 55 S. W. 137. d. If wrong and injury to a creditor be accomplished through the fraud of the debtor, actual or constructive, it is immaterial what form it assumes, equity will deal with the facts and substances without regard to Lehman v. Gunn, 51 forms or shadows. L.R.A. 112, 124 Ala. 213, 27 So. 475. e. A disposition by an insolvent of all his property in consideration of future support, though fraudulent as to creditors, cannot be set aside at the suit of the latter after the death of the insolvent and after support to an amount greater than that of the property received has been furnished. Kelsey v. Kelley, 13 L.R.A. 640, 63 Vt. 41, (Annotated) 22 Atl. 597. f. The recoveries of all the creditors of the seller of property in violation of statute cannot exceed in the aggregate the true value of the property fraudulently passed to the purchasers, and therefore converted. Fecheimer-Keiffer Co. v. Burton, 51 L.R.A. (N.S.) 343, 128 Tenn. 682, 164 S. W. 1179. a conveyance g. The question whether was in fraud of creditors may be determined in an action of ejectment brought by one who purchased under a creditor's judgment. XIII. Remedies. Brasie v. Minneapolis Brewing Co. 67 then maintain ejectment to recover the L.R.A. 865, 87 Minn. 456, 92 N. W. 340. h. An ordinary suit in equity to set aside a fraudulent conveyance cannot be maintained by a creditor whose debt is not due, but such a creditor to obtain relief must invoke attachment. Gilbert v. Peppers, 36 L.R.A. (N.S.) 1181, 65 W. Va. 355, 64 S. E. 361. § 45. Treating transfer as a nullity. See also ante, § 44 a. a. A fraudulent conveyance by the legal and equitable owner of property, made with intent to cheat, hinder, delay and defraud his creditors, may be treated by the attaching creditors of such owner as absolutely void and a nullity, as though it had never been made; and the property remained, as it actually was, the property of the debtor; as such conveyance is, at most, only a cloud on the title of the debtor, and, if required, may be removed in any proper proceeding brought for that purpose. Westervelt v. Hagge, 54 L.R.A. 333, 61 Neb. 647, 85 N. W. 852. b. Where a transaction involving a transfer of property is void as to creditors of the transferrer, and equity jurisdiction is not necessary to remove a cloud on title or for some other relief within the peculiar field of equity jurisdiction, the creditors may proceed at law, treating such transaction as if it never occurred, it being void as to them, and the bringing of an action inconsistent with the validity of the transfer being a sufficient election. Atlanta & Walworth Butter & Cheese Asso. v. Smith, 32 L.R.A. (N.S.) 137, 141 Wis. 377, 123 N. W. 106. § 46. attachment or garnishment. Of proceeds of sale of goods in hands of one who purchased them without complying with bulk sales law, by creditors of merchant, see ante, § 10 e. Obtaining lien by garnisheeing purchaser, see GARNISHMENT, § 53 e. See also ante, § 44 h. a. The remedy of a creditor against a fraudulent transfer of property by his debtor is by suing the debtor and reaching the property by attachment or garnishment. Rothchild Bros. v. Trewella, 68 L.R.A. 281, 36 Wash. 679, 79 Pac. 480. possession of the same, but can recover only upon establishing that the transfer was in fact fraudulent as to him. Brasie v. Minneapolis Brewing Co. 67 L.R.A. 865, 87 Minn. 456, 92 N. W. 340. b. A judgment creditor's issuing execution and levying upon and selling land which his judgment debtor has previously conveyed by a deed voidable as to him because of fraud renders the conveyance absolutely void, and vests the legal title in the purchaser at the execution sale. Wagner v. Law, 15 L.R.A. 784, 3 Wash. 500, 28 Pac. 1109. land that tangible personal property-goods c. It is the law in Alabama as in Engand chattels could be levied on at law, in the hands of a fraudulent transferee, and that execution sale thereof carries a perfect Terminal & I. Co. 2 L.R.A. (N.S.) 130, 143 title to the purchaser. Hall v. Alabama Ala. 464, 39 So. 285. § 48. Priorities of creditors. Priority of judgment against vendor, see JUDGMENT, § 233 h, i. fraudulent conveyance obtains a lien on a. A general creditor who first attacks a the property by the institution of his suit; and preferences among all of such creditors are determined by the dates of the commencements of their suits, if separate suits are brought, or of the commencement of the their rights in the same suit. suit and the filing of petitions, if all assert Gilbert v. Peppers, 36 L.R.A. (N.S.) 1181, 65 W. Va. 355, 64 S. E. 361. b. Judgment creditors of a debtor who has made a fraudulent conveyance have liens on his real estate from the dates of their respective judgments, and on his personal property from the dates of the acquisitions thereof by execution, attachment, or otherwise, whether they be acquired before or after the conveyance, if they are preserved by complaince with registration and other laws provided for the purpose. Gilbert v. Peppers, 36 L.R.A. (N.S.) 1181, 65 W. Va. 355, .64 S. E. 361. § 49. Effect of setting aside convey ance. Effect on rights of attaching creditor of grantee, see ATTACHMENT, § 21 m. b. Although the test of the liability of a garnishee is ordinarily whether he had propa. A decree setting aside a conveyance erty, funds or credits in his hand for which as a fraud upon the grantor's creditors the debtor can sue him, if a creditor has does not make the deed invalid as to anyfraudulently conveyed property to another one except such creditors. Bell v. Wilson, the grantee may be charged as garnishee. Arthur v. Morrow, L.R.A.1918A, 400, 131 Md. 59, 101 Atl. 777. § 47. sale on execution. See also ante, § 44 a; CLOUD ON TITLE, §§ 5 L.R.A. 320, 52 Ark. 171, 12 S. W. 328. b. The avoidance of a fraudulent transfer leaves the creditor the same remedy against the property as if the transfer had not been made, and the creditor is not placed in any better position in respect to the property than if no fraudulent transfer had a. A defrauded creditor may cause prop- been made. Kennedy v. First Nat. Bank, erty fraudulently transferred to be sold on 36 L.R.A. 308, 107 Ala. 170, 18 So. 396, 113 execution against a fraudulent grantor, and | Ala. 279, 21 So. 387. 1 n, 14 a. |